"Looking only at the taxi sector, the combined company’s share would be small," the US company said.

According to data furnished by Uber, the size of the official Russian taxi sector is approximately $8.4 bln and the unofficial part of the taxi sector is estimated at $1.9 bln more. "That means that the new combined company’s share of the taxi sector would have been only about 5-6% of overall gross bookings," press service of Uber said.

The broader Russian local transportation sector "is highly competitive and consumers have many choices - including taxis, buses and, most important, the private cars," Uber said. "Yandex and Uber make up a small share of this overall market," the press service said. "Indeed, ridesharing today is underpenetrated in Russia and the combined business will help grow the segment and bring its benefits to more Russians," it added.

Yandex.Taxi and Uber announced earlier that the companies agreed to combine their businesses in Russia, Azerbaijan, Armenia, Belarus, Georgia and Kazakhstan.

According to the report from Yandex, both Yandex.Taxi and Uber app will operate as before, driver apps, on the other hand, will be transitioned to a unified platform. The new company will also operate the UberEATS service in the region.

Uber will invest $225 mln and Yandex will invest $100 mln into the combined company, valuing it at $3.725 bln on a post-money basis. Yandex does not rule out the initial public offering (IPO) for the new Yandex.

The transaction is still subject to regulatory approvals and is scheduled to close in the Q4 2017.